Airlines told: revise prices or you will lose customers

3 October 2001
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04 October 2001 | Robin Parker

Travel buyers have urged high-cost airlines to revise their pricing policies or risk losing business custom as events in the US cause companies to review their travel needs.

Tom Stone, director of global travel management at Vivendi-Universal, has suspended a preferred-supplier programme for an indefinite period and declared that "the gloves are off" once current contracts with its travel partners expire.

"No quarter will be given by travel purchasers to their partners in the airline or hotel sector because of the difficulties we now face," he said. "The sectors have enjoyed some good years, but now the cycle has turned."

Most major airlines have announced thousands of job cuts. Low-cost airlines such as Ryanair have said it will be business as normal, although the additional security they will inevitably have to put in place could raise costs.

Most travel managers SM spoke to have allowed staff not to fly if they do not want to. Loraine Holdcroft, executive director of the Institute of Travel Management, said travel buyers would become more selective.

Stone added that travel managers' cautious approach could be symptomatic of long-term concerns. "Some will have used it to answer the question they were already asking: is this trip necessary?" he said.

In the US, the Business Travel Coalition predicted a 50 per cent fall in business flights in the year to January 2002, and a third of National Business Travel Association members have suspended international travel altogether.

* The ITM and Management Solutions have revised the agenda of their Corporate Travel Forum on 6 November to take account of the US attacks. For more details, visit www.supplymanagement.com/events.asp.

SMoct2001

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